It’s not uncommon for businesses to get excited about promoting new products or services through paid search advertising.
But sometimes, they forget they’ll need to either increase their advertising budget for this new endeavor – or re-allocate some of their existing budget.
Unfortunately, when you shift marketing budget from one area to another, you trigger a set of trade-offs.
And so, these businesses have to make some tough decisions. We had this happen recently with a client.
And today, I’ll use it as an example of some of the trade-offs you have to make when dedicating some of your existing budget to a new product launch.
The Launch of a Game-Changing Product
Our client develops automation solutions for factories. It markets its products around the globe, including 12 EU countries.
We’ve been managing the EU part of its Google Ads advertising, and we’ve divided these countries into primary and secondary groups within the account to align with the company’s business goals.
For the primary country group, we deploy a comprehensive campaign strategy.
For the secondary country group, we run fewer campaigns that focus mostly on branded terms.
We have a budget of €15,000 a month for all campaigns.
Recently, this client developed a new product with game-changing technology.
Naturally, the company is eager to promote this product and get market penetration quickly.
We agreed to dedicate €5,000 to the promotion of this new product. Unfortunately, it would have to come out of our existing budget.
Which brings us to the central question: how do we scale back this client’s existing PPC program to make up for this budget reallocation?
Normally, you’d start with the usual suspects, such as device adjustments, negative keywords, and scheduling, but we’ve already optimized this account.
And even if it wasn’t optimized, none of these options would make up for the €5k budget reallocation.
1. Scale Back or Discontinue Secondary Tier Campaigns
If you’re running primary and secondary campaigns, then secondary campaigns might seem like a reasonable thing to cut.
After all, if primary campaigns are the most important in relation to business goals, then what’s the harm in spending less on secondary?
In the case of our client, the drawbacks are clear.
Countries in the secondary group (such as Poland and the Czech Republic) don’t perform as well as the countries in the primary group (such as Germany and France).
However, countries in the second group are important emerging markets for this client.
Every year, those countries generate more and more leads.
If we cut back on advertising in these countries now, it may jeopardize future growth and open the door to competitors.
2. Scale Back or Discontinue Advertising for Specific Product/Service Groups
Similarly, you might cut back on advertising a specific product or service line.
Again, this might seem like a good way to go.
But you run the same risk of losing market share on these product and service offerings.
In the case of our client, they worried they would lose momentum with these products and jeopardize future growth.
3. Stop Bidding on Brand or Non-Brand Terms
Another strategy in this kind of situation is to stop bidding on non-brand terms.
Leads generated through non-brand terms are often more expensive than those generated by brand terms, so cutting these campaigns is tempting.
But this strategy comes with risks as well.
Advertising that uses non-brand terms can be an important contributor to sales and help with brand development in the long run.
Surprisingly, we’ve also seen the opposite situation – where a client asked us to pause campaigns where we were bidding on brand.
In this case, it was the client’s in-house SEO team that drove the request.
The client wanted us to stop bidding on brand so that the SEO team could increase brand traffic via SEO.
We were skeptical of this idea, but his request was approved and we paused the campaigns. Thankfully, two months later we were allowed to bid on brand again.
In the case of our factory automation client, pausing either brand or non-brand terms wasn’t a good option.
Pausing brand terms wasn’t a route we wanted to pursue because we wanted to continue to control the message at the top of SERPs and impression ads on pages we know convert well.
Leaving all of this up to organic listings alone would be too great of a risk.
So we concluded that leads generated by brand terms were too valuable and numerous to give up.
We also opted not to specifically cut non-brand terms, however, these campaigns might be paused indirectly as we focus more on performance. (Spoiler alert! See more on this below.)
4. Focus Only on Top-Performing Campaigns
This brings us to our final option: focus only on top-performing campaigns.
This may sound like a no-brainer.
Why wouldn’t you favor top-performing campaigns over ones that convert less or come at a higher cost?
But again, this isn’t as straightforward as it seems.
For example, let’s say Product A is a top-level performer in Google Ads and generates all kinds of leads. Product B gets some leads but not as many.
If you follow the logic of focusing only on top-performing campaigns, then you would cut Product B advertising.
But what if Product A isn’t as valuable in terms of revenue?
And what if Product B is the linchpin of the company’s new direction?
In this kind of scenario, you don’t want to make decisions purely based on performance.
Communication with the client is key in this kind of situation. You’d need to work closely with the client to rank product groups or create a system to execute cuts.
In addition, focusing entirely on performance – to the detriment of brand awareness – also comes with risks.
Brand awareness is an investment in your brand and future, and it’s an important way to protect yourself from competitors.
Scaling Back Your PPC Program Comes with Risks
In the case of our client, we opted to go with option four: focus only on top-performing campaigns while working closely with them to ensure our optimizations align with their business goals.
Our client is aware of the risks, and we’re monitoring everything closely to identify issues as they emerge.
In the meantime, our hope is that this new product will perform well – and eventually allow the company to increase our PPC budget to a level where we can restore the campaigns we had to pause.
Because while scaling back is often necessary, it does come with risks.
And the sooner we can scale back up, the better.
This article was originally published on Search Engine Journal.
